Why Should Credit Limit Be Imposed.Is it necessary for the company to inform the customer about its credit limit and credit terms?
In credit control or management, it is important to set credit limit for each customer. By setting credit limit, it has the following advantages:
- the firm is able to limit its credit risk or losses caused by fraud or a sudden worsening of a customer’s position.
- Having credit limit set means that modest check or no check needs to be done and
- the firm has conducted checks, they reveal something worrying.
Next, is it necessary to inform the customer pertaining to its credit limit and credit terms.
The answer is yes. Once a company has set a credit limit and terms for its customer, it is best  to inform the customer accordingly. If we don’t one day, the customer will find out if it results in an order being refused. By informing the credit limit, the message might be a strong one to the customer but at least the customer will then be able to understand the company’s virtues pertaining to firmness and or fairness and or friendliness.
- What Factors To Consider When You Increase The Credit Limit Of A Customer
- How To Be Proactive To Offer Alternatives For Marginal Customers Or Those Who Want To Increase The Credit Limit/Terms
- Use The Corporate Guarantee Form When Granting Credit Facility To Your Customer Who Belongs To A Group of Companies
- Credit Management: An Overview, its Importance and Characteristic of a Company having a well run credit management department
- ALL TOPICS COVERED UNDER THE HEADING-CREDIT MANAGEMENT/CREDIT CONTROL
- Using Trade Reference As Part Of Credit Vetting Procedures
- What Are The Roles/Function Of Credit Management Department
November 28, 2009
Tags: Credit control, Credit management
Posted in: CREDIT MANAGEMENT/CONTROL
Leave a Reply